Nearly 70 percent of explanation of benefit (EOB) forms issued by surveyed health-care providers confuse people who receive them. The forms failed to be even basically understandable. Only three insurers surveyed included charts or graphics to help consumers understand how their benefits work. Relevance: Closely reading of EOBs policyholders is important to uncovering whether shady medical providers have made bogus claims against a policy. EOBs that are confusing will make it harder to detect suspicious bills, and discourage close reading to begin with.
The U.S. spends more than $2 trillion on healthcare annually. At least 3 percent of that spending — or $68 billion — is lost to fraud each year.(National Health Care Anti-Fraud Association, 2008)
More than $2.4 billion in recoveries for fraud, waste and abuse in federal healthcare programs are expected for the first half of FY 2009 (October 2008 through March 2009). Some 1,415 individuals and organizations also were excluded from federal programs for fraud abuse; 293 criminal actions were brought, as were 243 civil actions. (Semiannual Report to Congress, Office of Inspector General, Department of Health and Human Services, Office, 2009)
Fraud accounts for 19 percent of the $600 billion to $800 billion in waste in the U.S. healthcare system annually. Fraud amounts to between $125 billion and $175 billion annually, including everything from bogus Medicare claims to kickbacks for worthless treatments and other services. (Thomson Reuters, 2009)
Fake health plans
Small businesses often are targets of swindlers who sell fake health plans. A big reason: Many entrepreneurs don’t know enough about group health insurance. They become natural targets for sales pitches for fake policies that promise generous benefits and easy signup at suspiciously low prices.
In fact, state insurance departments shut down several health plans that were selling unlicensed coverage in 2008 and 2009. This suggests a potential resurgence of bogus health plans targeting small businesses and consumers, exploiting the economic uncertainty of the recession.
- Two thirds of small business owners say they aren’t confident choosing a health policy that fits their budgets and employees’ needs.
- One-third say they can’t afford to provide health insurance for their employees.
- Only 27 percent say they understand all the factors that can affect their small-group premiums. (National Association of Insurance Commissioners, August 2009)
Private health insurance
- Every $2 million invested in fighting health-care fraud returns $17.3 million in recoveries, court-ordered judgments, plus bogus claims that weren’t paid and other anti-fraud savings. (National Health Care Anti-Fraud Association, 2008)
- The average health insurer’s anti-fraud investigative unit has an annual budget of slightly more than $1.9 million and 19 fulltime employees. (ibid)
- The average health insurer has 363 open cases in 2007, and each insurer investigation unit handled an average of 791 cases total for 2007. (ibid)
- More than seven of 10 insurer investigative units use fraud-detection software. (ibid)